The new <a href="https://www.apartments.com.au/new-apartments/yarraville-green-42-stephen-street-yarraville-vic-3013">Yarraville Green</a> development in Melbourne's inner west is showing that landscaping can be just as influential as architecture, with buyers responding strongly to the garden-first approach adopted from the outset by developer Excelon Projects and the project's design team.

Excelon appointed Six Degrees Architects and landscape architects SBLA to work collaboratively on the development, with a brief to create "a sustainable, design-led building with a focus on community."

That approach has resonated with buyers. According to Next Chapter Director Tom Hirini, who is leading the sales campaign, the landscaped communal garden has become one of the project's defining features, alongside its boutique scale and European-inspired cluster housing concept.

Local downsizers, right-sizers and established families already living in Yarraville and surrounding suburbs have accounted for the majority of purchasers.

[smartcode_project:default project_id=144913 project_image_fid=297740]

Yarraville Green will comprise 53 homes, including apartments and townhomes, arranged around the shared central garden to maximise connections to the landscaped open space. Parking has been moved underground, allowing the ground plane to be dedicated to greenery, pedestrian movement and communal spaces.

The landscape extends well beyond passive planting. Productive garden beds, a pergola, communal gathering spaces, garden sheds and a pet wash have all been integrated into the masterplan, creating spaces designed to encourage everyday interaction between residents.

[smartcode_project:default project_id=144913 project_image_fid=297741]

The interiors continue Excelon's focus on craftsmanship, incorporating bespoke elements by Melbourne artisans including leadlight detailing by Adadaz, hand-turned timber hardware by Auburn Woodturning and blown-glass lighting by Ruth Allen.

Sustainability has also been embedded throughout the project, with Yarraville Green targeting an average 7-star NatHERS energy rating through passive design principles, rooftop solar servicing common areas and rainwater harvesting for landscape irrigation.

[smartcode_project:default project_id=144913 project_image_fid=297735]

Construction continues to progress at Yarraville Green, with structural works well underway and framing works approaching completion under builder Balmain &amp; Co. The project remains on track for completion in mid-2027.

Apartments at Yarraville Green are currently priced from $625,000, while townhomes start from $1.4 million.

[smartcode_project_cta:default project_id=144913]

Joel Robinson

Garden-led design drives buyer demand at Yarraville Green

National diversified developer Fortis has officially launched Crest &amp; Walker, its latest Brisbane apartment development, with construction now underway on the 20-storey Newstead project.

Award-winning builder BINAH has commenced construction on the Bureau^Proberts-designed building, which will deliver a limited collection of 65 two and three-bedroom apartments on Kyabra Street.

[smartcode_project:default project_id=145922 project_image_fid=373556]

The project marks Fortis' fourth active residential development in Brisbane, following River House, which is nearing completion, alongside projects in New Farm and Hamilton as the national developer continues to expand its South East Queensland pipeline.

Fortis General Manager – Development Queensland Dan Boman said Crest &amp; Walker reflects the developer's long-term commitment to delivering design-led residential projects in Brisbane's established inner-city suburbs.

"We're proud to be strengthening our presence in Brisbane with Crest &amp; Walker, particularly in such a sought-after lifestyle destination as Newstead," Boman said.

"Every Fortis project is shaped by its context, and we approach each one with the respect and care it deserves.

"Our focus is always on creating places that feel connected to their neighbourhood and elevate the everyday experience for residents. Newstead continues to evolve as one of Brisbane's most sought-after urban communities, and Crest &amp; Walker reflects our ambition to contribute meaningfully to that story."

[smartcode_project:default project_id=145922 project_image_fid=373559]

Positioned between Gasworks Plaza and James Street, <a href="https://www.apartments.com.au/new-apartments/crest-walker-newstead-12-kyabra-street-newstead-qld-4006">Crest &amp; Walker</a> has been designed as a boutique residential address offering privacy and generous living spaces within one of Brisbane's most established lifestyle precincts.

The building features a contemporary brick podium softened by integrated landscaping, while the upper levels are characterised by restrained architecture and enduring materiality. Interiors have been designed to maximise natural light, acoustic performance and long-term liveability.

[smartcode_project:default project_id=145922 project_image_fid=373583]

Residences comprise spacious two and three-bedroom floorplans, with two-bedroom apartments priced from $1.55 million and three-bedroom, half-floor residences from $3.95 million.

Residents will have access to a wellness-focused rooftop featuring a swimming pool, sauna, steam room, landscaped dining spaces and outdoor lounge areas overlooking Newstead and the Brisbane CBD.

[smartcode_project:default project_id=145922 project_image_fid=373571]

Sales are being managed by Slaite Projects, with Fortis expecting strong demand from owner-occupiers seeking a high-quality, design-focused apartment in one of Brisbane's most tightly held inner-city suburbs.

Completion of Crest &amp; Walker is slated for late 2028.

[smartcode_project_cta:default project_id=145922]

Fortis expands Brisbane pipeline with launch of Crest & Walker in Newstead

The enormity of delivering a true skyscraper in Australia's new development market is often overlooked.

It has taken the best part of a decade since plans for Chevron One were first unveiled, but the 41-storey tower is now complete, with residents collecting their keys and moving into what has become one of the Gold Coast's most recognisable new landmarks.

Rising 127 metres above Chevron Island, Chevron One stands almost twice as high as any other building on the island. Its scale places it alongside the trio of towers at Jewel, arguably the last truly significant addition to the central Gold Coast skyline when they were completed around six years ago.

While there are several developments underway around a similar height to Chevron One, they are more concentrated within clusters of the highest towers in the city. The fact Chevron One sits within a developing precinct, looking back at the other high-rise developments in Surfers Paradise and Broadbeach, makes it a different proposition altogether. It will certainly become a reference point on the Gold Coast skyline.

[smartcode_project:default project_id=6515 project_image_fid=68833]

Developer Bensons Property Group is behind the 41-storey tower, which has 229 apartments, along with an exhaustive list of resident amenity spread across what is the largest development site ever assembled on Chevron Island.

The tower has been the talk of the town for years, says Ray White Projects Gold Coast agent Caitlin Rosenboom, who is selling the remaining apartments.

"People have been watching Chevron One go up for years," Rosenboom says, adding that many prospective buyers have been surprised by the scale of the views once they step inside.

"It's only when they walk through a completed apartment that they truly understand the position of the building," Rosenboom says.

"The views are jaw-dropping. Whether you're looking east over the ocean, across Surfers Paradise, along the river systems or out to the hinterland, every level offers something different but equally impressive."

[smartcode_project:default project_id=6515 project_image_fid=360215]

One of Chevron One's defining advantages is its location on the eastern side of Chevron Island on Stanhill Drive, a position which protects the views forever.

"There's only one row of houses between Chevron One and the water, and the height restrictions along the river means views from Chevron One can never be built out,"&nbsp;Rosenboom says.

While new apartment developments continue to emerge across the Gold Coast, Rosenboom says opportunities to secure a completed apartment with this level of outlook are becoming increasingly rare.

"The size of the site is something that would be incredibly difficult to replicate today," she says.

"That's allowed Chevron One to deliver the sort of amenity, open space and resident facilities that very few projects can offer. There are not many completed apartment buildings on the Gold Coast right now that can compete with the combination of scale, quality and amenity."

[smartcode_project:default project_id=6515 project_image_fid=68839]

There's around 2,000 sqm of amenity solely for the use of residents of Chevron One. Club One features a uniquely shaped swimming pool that mirrors the footprint of the building itself, set within a extensively landscaped gardens. There's also an indoor pool and spa, a fully equipped gym with a Pilates room, a yoga garden, a bookable private dining area and lounge that can host up to 30 people, and a 24-hour concierge service.

As for the buyers, Rosenboom is fielding enquiry from everywhere: Sydneysiders and Melburnians looking at the new and off-the-plan market following the changes in the Federal Budget, as well as those looking to relocate, through to South East Queenslanders seeking either a permanent home or a weekender bolthole.

"The Gold Coast lifestyle continues to resonate with people relocating from the southern states, and when they see the views and the quality of what's been delivered at Chevron One, it becomes very easy for them to understand the appeal," Rosenboom says.

A diverse mix of one, two and three-bedroom apartments remain available, with each offering "something a little different", be it the orientation and views, configuration, or level, to suit a wide variety of buyers.

The remaining apartments are ready to inspect in person, by appointment.

[smartcode_project_cta:default project_id=6515]

A decade in the making: Residents to move into Chevron One as construction wraps up

A general rule of thumb in new apartment developments is that the penthouses get the rooftop.

It's a formula that's become commonplace across Australia's apartment market. Residents might have access to a pool, gym or barbecue facilities on a dedicated lower level, but the most desirable outdoor spaces are typically reserved for the highest-priced homes at the top of the building.

<a href="https://www.apartments.com.au/developers/sherpa-property-group">Sherpa Property Group</a> has taken the opposite approach.

Rather than dedicating the rooftop to a handful of buyers, the Gold Coast developer has made it the centrepiece of its Flourish collection, creating expansive shared spaces from the best vantage point in the building.

The philosophy has reached its most ambitious expression at <a href="https://www.apartments.com.au/new-apartments/flourish-soleira-palm-beach-1150-1160-gold-coast-highway-palm-beach-qld-4221">Flourish Soleira</a> in Palm Beach, where two rooftop precincts connected by a skybridge will deliver one of the most extensive lifestyle offerings seen in a residential apartment project on the Gold Coast.

[smartcode_project:default project_id=150017 project_image_fid=374053]

"We're seeing a clear move toward developments that offer more than just an apartment," Sherpa Group founder Christie Leet said.

"People want spaces that support how they actually live, whether that's working from home, staying active, or spending time with family and friends.

"That's where amenity becomes critical. It's not just about what's included, but how those spaces are designed to be used every day."

[smartcode_project:default project_id=150017 project_image_fid=374052]

The breadth of amenity has already attracted buyers across multiple demographics. Younger first home buyers have been drawn to Soleira's one-bedroom apartments, a product rarely delivered in Palm Beach, while families have responded to practical inclusions such as the shallow children's pool adjoining the main lap pool and the extensive communal recreation areas.

Instead of a single rooftop, Soleira delivers two distinct lifestyle zones.

[smartcode_project:default project_id=150017 project_image_fid=372547]

The southern rooftop has been dedicated to wellness, featuring a gym, yoga and Pilates studio, work-from-home facilities, a wellness centre, spa, and hot and cold plunge pools.

The northern rooftop focuses on recreation and entertaining, incorporating a heated resort-style pool, private dining rooms, pizza ovens, barbecues, a golf simulator, children's recreation areas, and what is expected to be the Gold Coast's first rooftop basketball court, which will also double as a squash court.

[smartcode_project:default project_id=150017 project_image_fid=374054]

Beyond the rooftops, Soleira will introduce 1,500 sqm of curated retail beneath the towers, creating one of Palm Beach's first genuinely mixed-use lifestyle precincts where cafés, restaurants and convenience retail become part of residents' everyday lives.

Sherpa has also retained management rights across the development, allowing it to oversee the long-term operation of the building through a 24-hour concierge model. The developer is also exploring additional revenue streams within the precinct aimed at helping offset ongoing body corporate costs for residents.

[smartcode_project:default project_id=150017 project_image_fid=370962]

While Soleira is the largest project Sherpa has delivered, the rooftop-first philosophy has been evolving for several years.

It began with <a href="https://www.apartments.com.au/new-apartments/amargo-6-12-sixth-avenue-palm-beach-qld-4221">Flourish Amargo</a>, the first project released under the Flourish brand. Rather than competing at the ultra-luxury end of the market with oversized half-floor and full-floor residences, Sherpa focused on creating lifestyle-driven apartments supported by resort-style shared spaces.

Amargo introduced more than 800 sqm of rooftop amenity, combining wellness facilities, heated pools, entertaining areas, cabanas, pizza ovens and private dining spaces into what was designed as an extension of residents' homes rather than a facility used only occasionally.

[smartcode_project:default project_id=146527 project_image_fid=366550]

That approach continued with Flourish Oasis, where the same amenity-led philosophy was refined into a more boutique development. Strong demand from Sherpa's growing VIP database saw much of the project sold before it reached the broader market, reinforcing buyer appetite for apartment communities centred around shared lifestyle experiences.

Flourish Amargo is slated for completion mid-way-through next year, with Oasis to be delivered by late 2027. Flourish Soleira is expected to complete in 2030.

[smartcode_project_cta:default project_id=150017]

Sherpa takes amenity to the sky as Flourish Soleira captures booming Palm Beach demand

As apartment living continues to evolve across Sydney's growth corridors, the quality and distribution of shared spaces is increasingly shaping how residents experience home. Rather than functioning as add-ons, amenities are being embedded into the daily rhythm of a building, supporting everything from quiet retreat to social interaction, often within a single vertical community.

At <a href="https://www.apartments.com.au/new-apartments/aeris-melrose-park-nursery-street-melrose-park-nsw-2114">Aeris</a> in Melrose Park, this approach is resolved through a layered amenity offering that unfolds from ground level through to its upper podium. Developed by <a href="https://www.apartments.com.au/developers/sekisui-house-australia">Sekisui House Australia</a> in partnership with Hankyu Hanshin Properties, the project introduces 468 apartments across two towers and a mid-rise building, positioned at the highest point of the broader masterplan.

[smartcode_project:default project_id=426 project_image_fid=359199]

The amenity experience begins at street level, where two courtyards sit within a landscaped setting that connects residents to the wider network of parks and green spaces. These green spaces are not isolated pockets but part of a wider pedestrian network that links Aeris to the surrounding <a href="https://www.apartments.com.au/developments/melrose-park-nsw-2114">Melrose Park</a> precinct, including Central Park, future schools, and the Town Centre opening in July 2026. The result is a transition that moves from public to private without abrupt boundaries, allowing residents to pass through shaded, tree-lined environments before reaching the building itself.

Moving upward, the focus shifts to the level five podium, where the primary communal facilities are concentrated. This space brings together a 16-metre swimming pool, outdoor seating areas, and a communal BBQ zone arranged to take advantage of elevated outlooks. Seating is positioned beneath pergolas, creating pockets of shade that extend the usability of the space throughout the day. The pool edge aligns with views toward the wider district, reinforcing the sense of elevation that defines the project’s positioning.

In the adjacent building, this is complemented by quieter, more contemplative spaces, including an outdoor cinema set within the same level. Positioned to operate primarily in the evening, it introduces a different tempo to the shared environment, shifting from daytime activity to after-hours use without requiring separate zones.

[smartcode_project:default project_id=426 project_image_fid=360299]

The podium also accommodates an intimate private resident gym. Located on the lower levels, it gives residents convenient access to fitness facilities without leaving the building.

Above, the elevated podium sky deck extends the amenity offering, providing additional open-air spaces with elevated outlooks across the surrounding landscape. While more restrained in program, this upper level reinforces the project’s vertical progression, from ground-level greenery to elevated outlook, allowing residents to move between distinct spatial conditions within a single address.

This distribution of amenities reflects a deliberate response to how residents use space across the day. Sekisui House Australia Sales and Marketing Director Peter Kalaf points to the role these shared areas play in shaping buyer demand. Aeris has been conceived as more than a collection of apartments, with the podium pool, gym and outdoor cinema forming part of a broader lifestyle offering that extends the home beyond each individual residence.

[smartcode_project:default project_id=426 project_image_fid=360300]

What distinguishes Aeris is not the inclusion of these elements individually, but how they are arranged in relation to one another. Active, social, and passive spaces are layered vertically rather than separated, allowing residents to choose between them without leaving the building or moving far from their apartment. This proximity supports both routine use, such as a morning swim or evening workout, and more occasional gatherings, whether around the BBQ area or within the cinema setting.

The amenity design also sits within a broader framework of connectivity across Melrose Park. The Melrose Park Town Centre, anchored by Coles and Dan Murphys, features a mix of retail, dining, health and lifestyle offerings, bringing everyday convenience closer to residents. By the end of the year, more than five hectares of parks and open space, equivalent to around seven football fields of green space on residents' doorstep, will further enhance the precinct, allowing the internal facilities at Aeris to operate as an extension of the wider neighbourhood rather than a substitute for it.

Construction at Aeris continues to gather momentum, with ground floor slabs expected to be completed in late 2026 before the first sections of the buildings begin to rise above ground.

[smartcode_project_cta:default project_id=426]

Elevated amenity anchors daily life at Aeris, Melrose Park

Housing Affordability

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<img src="https://counter.theconversation.edu.au/content/75130/count.gif?distributor=republish-lightbox-advanced" alt="The Conversation" width="1" height="1">
GUEST OBSERVER
Climbing house prices seem to scare people but houses are relatively more affordable today than they were in 1990, it’s actually interest-rate risk that’s the bigger problem for first home buyers.
If you look at latest numbers on house prices, as a measure of affordability, they use a “median measure” – that is, the ratio of median house price to median salary. According to the latest Demographia survey, the price of the median Sydney house is 12.2 times the median salary, and it is 9.5 in Melbourne.
But it’s simply misleading to compare median-based measures of housing across different time periods in the same location. These simple median measures do not take into account differences in interest rates in different time periods. 
A house in 2017 that costs nine times the median salary, when mortgage interest rates are less than 4%, is arguably more affordable than a house in 1990 that costs six times the median salary. Interest rates in 1990 were 17 percent.
Consider this simple example. In 1990 a first home buyer purchases an average house in Sydney priced at A$194,000. With mortgage interest rates at 17 percent, the monthly mortgage repayments were A$2,765 for a 30-year mortgage.
But in 1990 the average full-time total earnings was only A$30,000 per annum, so the buyer’s mortgage repayments represented over 111 percent of before-tax earnings. In 2017 a first home buyer purchasing a Sydney house for A$1,000,000, with interest rates at 4 percent, is only required to pay A$4,774 every month, or 69% of their before-tax average full-time total earnings. 
So, relatively, houses are substantially more affordable today than they were in 1990. The lower interest rate means the costs of servicing a mortgage is lower today than it was 25 years ago, or even 50 years ago. 
However, those lower interest rates also mean today’s first home buyers face greater perils than their parents or grandparents.
<h2>Interest-rate risk</h2>
Interest rate risk is the potential impact that a small rise in mortgage interest rates can have on the standard of living of homeowners. This does not consider the likely direction of interest rates, rather how a 1 percent change in interest rates affects the repayments required on a variable rate mortgage.
When interest rates rise so do mortgage repayments. But the proportional increase in repayments is higher when interest rates are lower. For example, if mortgage interest rates were 1 percent, then increasing interest rates by another 1 percent will double the interest costs to the borrower. When interest rates are higher, a 1 percent increase in interest rates will have a lower proportional affect on their repayments.
If we go back to the example from before, the interest rate risk of the first home buyer from 1990 is much lower than that of the 2017 buyer. If mortgage interest rates rose by 1 percent in 1990, repayments would rise by only 5.7 percent to $2,923. For the 2017 buyer on the other hand, a 1 percent increase in interest rates would see their repayments rise by over 12 percent to $5,368 per month. 
This has the potential to financially destroy first home buyers and, due to the high reliance of the retail banking industry on residential real estate markets, potentially create a systemic financial crisis. 
Interest rate risk has an inverse relationship to interest rates – when interest rates fall, interest rate risk rises. As a result, interest rate risk has been steadily increasing as mortgage interest rates have fallen. Given that we have record low interest rates at the moment, interest rate risk has never been higher.
<h2>Putting it all together</h2>
Compounding all of this is the general trend of interest rates. 
In 1990 mortgage interest rates were at a record high and so our first home buyer could reasonably expect their repayments to decrease in the coming years. They could also reasonably expect that, as mortgage interest rates fell, demand for housing would increase (all else being equal) and so would house prices, generating a positive return on their investment.
But our 2017 first home buyer is buying when interest rates are at record lows. They cannot reasonably expect interest rates will fall or for their repayments to go down in future years. It’s also unlikely that house prices will increase as they have for previous generations. 
So while the current generation of first home buyers find housing much more affordable than their parents, they face substantially higher interest-rate risk and a worse outlook for returns on their investment. If we wish to address the concerns of first home buyers we should look into these issues rather than exploiting misrepresentative median-based measures of house affordability. 
Apart from addressing issues with the supply of housing, governments need to investigate ways to reduce interest rate risk over the longer term.
Jamie Alcock is associate Professor, University of Sydney and author for The Conversation. He can be contacted <a href="https://theconversation.com/profiles/jamie-alcock-349860" target="_blank">here</a>.
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j.ballantyne1990-6AQqhLzZaK

Houses aren’t more unaffordable for first home buyers, but they are riskier

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<img src="https://counter.theconversation.edu.au/content/75060/count.gif?distributor=republish-lightbox-advanced" alt="The Conversation" width="1" height="1">
GUEST OBSERVER
As the federal budget approaches, the government is grappling with ways to enhance housing affordability, including reforming the current 50 percent capital gains tax (CGT) deduction on property investment.
The Economics Society of Australia (ESA) Monash Forum polled economists on this proposition:
"Capital gains tax deductions for housing investment should be removed because they overstimulate the housing market, contributing to rising house prices."
This is a deliberately more extreme measure than the proposal reportedly being considered by the federal government, which is to cut the current discount to 25 percent. But we wanted to assess more generally the effect of capital gains taxes on the housing market.
The poll found 44.4 percent of economists agreed with a statement that the tax deduction should be removed entirely (22.2 percent agreeing and 22.2 percent strongly agreeing). But 40.7 percent disagreed with the statement (22.2 percent disagreeing and 18.5 percent strongly disagreeing); while 14.8 percent of respondents were uncertain.
<a href="https://www.propertyobserver.com.au/images/2017/03/24/Screen%20Shot%202017-03-24%20at%209.10.49%20AM.png" target="_blank">Click to enlarge</a>
<img src="https://www.urban.com.au/images/2017/03/24/Screen%20Shot%202017-03-24%20at%209.10.49%20AM.png" alt="">
While some economists support the current role of the CGT discount to avoid taxing the capital gains that arise as a result of inflation increasing house prices, as opposed to the valuation in the land or property due to development (Saul Eslake, Rodney Maddock, Nigel Stapledon and Doug McTaggart), others believe the tax should also apply to the gains as a result of inflation (Kevin Davis and Margaret Nowak).
Many argued the principle of the CGT discount is not a bad policy, however the level of the discount is generous and is open for abuse.
They also pointed out that changes in one type of tax will distort the economy, especially if it is only targeted to one type of asset, in this case property. Instead some economists suggested the approach should be a holistic reform to fix tax inefficiencies, and tax treatment should be equal between all forms of investment and saving.
Most of the economists agreed housing affordability policies should be focused mainly on housing supply and housing market constraints (as well as transport and infrastructure) to solve the crisis. Other policies such as shared-ownership schemes and government-backed bonds are also being considered.
<h2>Capital gains tax</h2>
The capital gains tax (CGT) is calculated at the effective marginal tax rate of the investor, on the capital gains made at the time of sale of the asset. Investors who hold an asset for longer than 12 months receive a 50 percent discount on the CGT liability, at the time of sale. For superannuation funds, the discount rate is 33.3 percent.
Owner-occupiers are fully exempt from capital gains tax on the sale of their primary residence.
Some of the options reportedly being considered by the federal government include decreasing the CGT concession to 25 percent, decreasing it to 40% discount (as recommended in the Henry Tax Review) only for property investments, or some other reduction in the CGT discount for property investments.
Another option is completely removing the concession if the property is sold in the initial investment years; and phasing the discount in after the investment has been held for some specified number of years.
<h2>The economists’ arguments for and against</h2>
Economists who supported removing capital gains tax deductions for housing investment said the discount provides incentives to over-invest in property rather than other assets that provide income. So by eliminating or reducing the CGT discount, the cost of capital will increase and buyers will reduce their demand for property, resulting in lower, more affordable house prices.
Those who agreed with the statement argue any change in the CGT discount to address property speculation should also be accompanied by reforming negative gearing. They argue that eliminating the CGT discount for property only would push residential investors towards cheaper properties or towards investing in other assets that maintain the CGT discount. 
Most studies find no evidence of capital gains advantages being a main incentive for investors holding residential property. However it appears to be a small factor in the intention of investing in residential property.
Click to enlarge
<img src="https://www.urban.com.au/images/2017/03/24/Screen%20Shot%202017-03-24%20at%209.13.22%20AM.png" alt="">
<a href="https://www.propertyobserver.com.au/images/2017/03/24/Screen%20Shot%202017-03-24%20at%209.14.00%20AM.png" target="_blank">Click to enlarge</a>
<img src="https://www.urban.com.au/images/2017/03/24/Screen%20Shot%202017-03-24%20at%209.14.00%20AM.png" alt="">
Those against the statement argue the timing may not be right as the housing cycle is currently at its peak, and the double digit house price appreciation rates are only seen in the inner-ring suburbs of metropolitan cities and only for houses and not apartments.
Economists would expect to see only a short-term drop in house prices if the CGT deductions are eliminated, as investors switch away from property and into other assets. So the remaining residential investors in the market would purchase cheaper properties, potentially still crowding out first-home buyers.
They would also hold the property for a longer period. In the medium to long-term, the reduction in residential investment would impact on the new and existing supply of housing, resulting in housing shortage and rising house prices.
Maria Yanotti is lecturer of Economics and Finance Tasmanian School of Business &amp; Economics, University of Tasmania and author for The Conversation.
She can be contacted <a href="https://theconversation.com/profiles/maria-yanotti-349557" target="_blank">here.</a>
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jchancellor-FAypfDUnLy

Capital gains tax concession is too generous

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<img src="https://counter.theconversation.edu.au/content/75050/count.gif?distributor=republish-lightbox-advanced" alt="The Conversation" width="1" height="1">
GUEST OBSERVER
I didn’t think it was possible for there to be more focus on the Australian housing market than in 2016, but the last couple of weeks have proved me wrong.
ABS figures revealed that in the December quarter, across the eight major Australian cities, house prices rose 8.9 percent and apartment prices rose 4 percent. Those are stunning figures, particularly on the back of the huge rises of recent years.
This prompted renewed discussion about whether prices constituted a bubble. Many players weighed in, but former Liberal Party leader John Hewson put it most succinctly, saying on ABC’s Lateline:
“I think it’s a crisis, it is a bubble. I know people are hesitant in saying that, it is a bubble.”
In one sense it doesn’t really matter whether there is a housing bubble or not. Once buyers start believing there is and think it will burst, they have every incentive to wait to purchase. That dries up liquidity in the property market and sellers who need to sell are forced to take a steep discount. That justifies the buyers’ belief that prices are going to fall. And that, simply put, is how a bubble bursts.
Are we at that point yet? It’s hard to say, but given that a former Liberal Party leader, the ASIC chairperson, and the Secretary to the Treasury(among others) have said so recently, there is reason to think we might get there.
The most recent board minutes revealed the RBA was somewhat focused on housing as well. The minutes stated:
“Over recent months, conditions appeared to have strengthened in Sydney and had remained strong in Melbourne; these cities had continued to record brisk growth in housing prices, and auction clearance rates had remained high. Housing loan approvals and credit growth had picked up for investors, primarily in New South Wales and Victoria” and that this “continued to suggest that there had been a build-up of risks associated with the housing market.”
The minutes also noted a number of positive developments, from the terms of trade to the strength of our trading partners to business sentiment. The notable exception was the labour market which continued to confound understanding. The RBA noted that the key implication was that:
“Domestic wage pressures remained subdued and household income growth had been low, which, if it were to persist, would have implications for consumption growth and the risks posed by the level of household debt.”
It is difficult to assess the future path of the cash rate. The economy looks like it might be strengthening, and if business investment were finally to rebound, there would be a case for a rate rise. But with a weak labour market, a rise in rates would put the squeeze on those heavily indebted households. This could, in turn, detonate the property market. The nightmare scenario is that it has a big enough effect on bank balance sheets that they contract lending significantly, further hurting the property market.
This is the delicate tightrope the RBA is trying to walk.
The run-up in prices has put further focus on housing affordability. The Coalition have suggested they will announce a series of measures to address it in the budget. They are rumoured to be considering schemes like allowing first home buyers to access their superannuation – which is a very bad idea. It is another policy that fuels the demand side without addressing supply. I have said numerous times – including in my McKell Institute plan – that demand-side excesses such as negative gearing need to be curbed and the supply side needs to be encouraged.
The housing package might be the most interesting thing to look out for in the federal budget on May 9.
Richard Holden is professor of Economics and PLuS Alliance Fellow, UNSW and author for The Conversation.
He can be contacted <a href="https://theconversation.com/profiles/richard-holden-118107" target="_blank">here</a>.
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If it looks like a bubble and sounds like a bubble…

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Among the capital cities, Melbourne posted the largest through-the-year growth at 10.8 percent, with Sydney close behind at 10.3 percent.
House prices in both cities experienced strong growth in the December quarter, with house prices climbing 6.1 percent in Sydney and 6 percent in Melbourne. 
The mean price of dwellings in Australia is $656,800.
The numbers immediately added fuel to the housing affordability debate.
Research by Ben Phillips, an associate professor of economics and public policy at the Australian National University, showed that while Sydney house prices have jumped 70 percent in the last five years, the average income growth has increased just 13 percent. His analysis was carried in the Huffington Post.
"This result comes at the same time that Australia is in a home construction super cycle, building more homes than ever before. The house price growth is largely related to investor activity in Sydney and Melbourne,” Phillips was cited as saying by the Huffington Post.
“Low interest rates and tax incentives such as negative gearing and capital gains tax discounts are likely adding extra fuel to price growth."
Treasurer Scott Morrison had earlier said there would be a housing affordability package in the May budget and NSW Premier Gladys Berejiklian has already said one of her main goals is housing affordability. 
The mean price of residential dwellings in NSW ($864,900) remains the highest in the country followed by Victoria ($690,100). 
<a href="https://www.propertyobserver.com.au/images/2017/03/21/ABSPropertyPrices.png" target="_blank">Click to enlarge</a>
<img src="https://www.urban.com.au/images/2017/03/21/ABSPropertyPrices.png" alt="">
Perth continued to show weakness, with prices of attached dwellings falling 1.7 percent, followed by Brisbane (1.3 percent) and Darwin (2.5 percent), while prices rose in all other capital cities. The ABS defines attached dwellings that includes flats, units and apartments plus semi-detached, row and terrace houses.
The total value of Australia's 9.8 million residential dwellings increased $274.2 billion to $6.4 trillion. The mean price of dwellings in Australia is now $656,800.
<a href="https://www.propertyobserver.com.au/images/2017/03/21/ABSchart.png" target="_blank">Click to enlarge</a>
<img src="https://www.urban.com.au/images/2017/03/21/ABSchart.png" alt="">
<a href="https://www.propertyobserver.com.au/images/2017/03/21/ABSHousingValue.png" target="_blank">Click to enlarge</a>
<img src="https://www.urban.com.au/images/2017/03/21/ABSHousingValue.png" alt=""> 
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jonathanchancellor-7SQnKwU6yx

National property prices up 4.1 percent in the December quarter 2016: ABS

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House price growth is typically regarded as a good thing. It creates a feel good wealth effect which triggers spending across the economy.
But the recent scenario from the Organisation for Economic Co-operation and Development casts that concept aside.
The Paris-based OECD said in its latest economic report that the single biggest threat to Australia is from rising house prices.
They suggested a recession was possible after a hard landing in the property market following our years of double-digit price gains.
Putting the risk of a recession at around one in five, the report said the residential market may not ease gently but develop into a "rout on prices and demand" especially given that households account for around half of Australia's total debt.
Their warning came a day after gross domestic product data showed the we'd avoided recession in 2016.
It also coincided with CoreLogic calculation that Sydney's price growth had firmed even further through February.
It now sits at an 18.4 percent annualised price growth with the house median a $895,000 and apartments at $685,000. 
The last time there was similiar growth in Sydney was in 2003 when prices jumped 17 per cent in 12 months to $454,000. Soon afterwards the Sydney market had crashed and then an extended price plateau set in.
Even further back was 1989 when Sydney prices jumped 24 percent in the wake of the 1987 stockmarket crash and bicentennial switch into property, that resulted in an horrific crash during our last recession. 
Normally house prices fall because of the impact of rising unemployment or rising interest rates. For the past few years there's been the looming spectre of fallout from an envisaged Chinese downturn, which hasn't eventuated.
But the OECD now suggests house prices could collapse because the ever increasing prices will trigger households into the realisation that they were carrying too much debt. Regulatory retraints will kick in too as a contributing factor.
It will create a downward spiral in economic activity that pushes up unemployment, accelerating mortgage defaults, and creating distressed bank balance sheets, turning what may have been an orderly "correction" in house prices into what the OECD warns could be a "rout".
The OECD did not nominate any timing on the tipping point.
And OECD has been at the misinformed bearish end of the forecasting spectrum for many years.
Despite the headlines that always come after their reports, the mum and dad home buyers and investors have stopped listening.
Driven instead by the fear of missing out or being on the sidelines given continuing price gains in Sydney.
The OECD's report does echo the Reserve Bank's recent unease over household indebtedness, which the new governor Philip Lowe considers could backfire into a spending slowdown.
But we aren't seeing any impact at Saturday property auctions. They've sat at 80 percent or higher for the past month.
This article was first published in the Daily Telegraph. 
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Can too much house price growth hurt the economy?

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<img src="https://counter.theconversation.edu.au/content/74233/count.gif?distributor=republish-lightbox-advanced" alt="The Conversation" width="1" height="1">
GUEST OBSERVER
The need for more affordable housing close to public transport and services is acute in Melbourne.
Inner Melbourne has experienced a 74 percent increase in rough sleeping <a href="https://www.theage.com.au/victoria/shocking-record-numbers-of-homeless-people-sleeping-on-melbournes-streets-20160609-gpf1wk">in </a>the past two years. This is perhaps the most visible outcome of the lack of affordable housing options. Only 1 percent of advertised rental properties in the metropolitan area are affordable for households reliant on government assistance.
Buying or renting in the well-serviced inner and middle suburbs is increasingly out of reach for households on low and moderate incomes. A month ago, one of us wrote an article in The Conversation bemoaning the lack of government leadership on this issue. In the 15 months since its election, the Victorian government had not delivered promised revisions to the Plan Melbourne metropolitan strategy or an affordable housing strategy.
What a difference a month makes. It is almost as if some government leaders read the article. Every week (or to be more precise, weekend) since then has delivered a major policy announcement.
Now that Plan Melbourne and Homes For Victorians have been delivered, it is only fair that we provide a preliminary evaluation of how well these strategies meet the housing needs of Victorians on moderate, low and very low incomes.
These documents remain vague about the definition of “affordable housing”. They also do not designate various income groups. We have taken the liberty of defining these groups based on median income brackets.
Moderate-income households
We define moderate income as 80-120% of area median income – about A$68,500-$102,500 a year. In this group, first home buyers appear to be the biggest winners in Plan Melbourne and Homes For Victorians.
The Victorian government will waive stamp duty for first home buyers on homes worth up to $600,000 and taper stamp duty concessions on homes above that price. This is set to cost the government $851 million over four years and save the average buyer $8,000.
However, if previous first home buyer incentives have taught us anything, this is likely to inflate the cost of cheaper dwellings without delivering affordability benefits.
The government is also offering a shared equity program. This allows first home buyers to co-purchase their home with the government. The initiative is intended to support households that qualify for a bank loan but need help saving a deposit. Western Australia has a similar program, which has helped more than 1,500 households buy homes to date.
Low-income households
This group earns 50 percent-80 prcent of area median income, in the range of $42,500-$68,500 a year.
As exciting as the above options are for some first home buyers, they are out of reach for low-income households that earn between $800 and $1,300 per week. These households are unlikely to qualify for social housing but struggle to afford market rent and purchase prices.
This group, which includes many service and trades workers and their families, need a steady stream of new, appropriately sized and affordable market rental options. However, neither the Housing for Victorians nor Plan Melbourne talks specifically about a new scheme to replace the National Rental Affordability Scheme, which the current federal government abandoned in 2013.
It is absolutely true, as the affordable housing strategy states, that federal policies like capital gains tax exemptions and negative gearing favour investors over first-time and other resident homebuyers. However, state government policies can have an impact on scaling up a rental housing market.
In other cities with similar housing affordability crises, such as Vancouver, New York and London, a combination of expedited approvals, development levy abatements, inclusionary zoning and other mechanisms have helped develop new below-market rental units. Located near public transport and services, these are usually provided at particular price points and kept affordable in perpetuity.
Very-low-income households
These households have income of less than 50 percent of the area median, or under $42,500. They are likely to be the primary beneficiaries of significant new social housing funding and development.
The Victorian government has set up a $1 billion fund to support new social housing. The government will work with community housing providers to deliver social housing through new construction and rental subsidies. This is estimated to deliver up to 2,200 new housing units over the next five years.
This funding injection is badly needed: Victoria has the lowest proportion of social housing stock in Australia.
The state government is also increasing funding, or providing new funding, for a Family Violence Housing Blitz, support for transitions out of homelessness, and rooming house renovation.
A new $1 billion loan guarantee fund for social housing providers will be linked to a shared social housing rent registry. This will make life a little easier for the 33,000 households on the public housing waiting list. They currently have to separately register with up to a dozen other community housing providers.
Plan Melbourne has identified a policy direction to use surplus government land to develop social and affordable housing. Launch Housing and VicRoad’s proposal for Ballarat Road in Maribyrnong offer an example of how these partnerships might work. Plan Melbourne also focuses on increasing the supply of social housing through regeneration and intensification of existing public housing sites.
However, the strategy does not recommend a level of social housing as a proportion of total existing and new housing stock. To provide for all households now eligible for social housing, Victoria would require 76,000 more social housing units. By 2051, that figure is projected to increase to 140,000
Furthermore, Plan Melbourne projects a need for 1.6 million new homes in the next 30 years. That’s over 50,000 new homes a year. Of these, 5,000 would be required to meet the needs of low-income seniors, people with intellectual and physical disabilities, female-headed households escaping family violence, and others who simply cannot compete in the private rental market.
Now to make these plans work
 
 
The Andrews government has new housing and planning strategies, but has more to do to ensure they work. Tracey Nearmy/AAP
Plan Melbourne and Homes For Victorians provide several directions that could benefit all Victorians. Welcome aspects include greater emphasis on public transport networks, greater diversity of housing options, 20-minute neighbourhoods and practical mechanisms to get more housing closer to public transport and services.
The plans also make very encouraging noises about strengthening the role of planning in helping to deliver social and affordable housing. This includes overcoming the legislative and definitional barriers to the effectiveness of mechanisms like density bonuses or inclusionary housing.
The continuing lack of formal definition of affordable housing is a fundamental flaw in Victorian affordable housing policy that remains unsolved by Homes For Victorians and Plan Melbourne.
Plan Melbourne and Homes for Victorians together provide some welcome directions towards more well-located and affordable housing. But the previous Victorian planning strategy, Melbourne 2030, foundered in implementation.
Victoria will have to link infrastructure improvements to specific affordable housing targets in well-serviced areas. And the government should continue its work on value capture and development contributions to nail down implementation of its long-awaited affordable housing strategy.
Katrina Raynor is postdoctoral research fellow, Transforming Housing Project, University of Melbourne and can be contacted <a href="https://theconversation.com/profiles/katrina-raynor-255374" target="_blank">here</a>.
Carolyn Whitzman is professor of Urban Planning, University of Melbourne and can be contacted <a href="https://theconversation.com/profiles/carolyn-whitzman-9944" target="_blank">here</a>.
Both are authors for The Conversation.
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What a difference a month makes, but Victoria can still do more to get housing and planning right

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The median house price across Australian capital cities has increased by 4.1 per cent for houses and 2.1 per cent for other dwellings, according to the latest data from the Real Estate Institute of Australia, adding to the debate about housing unaffordability.
The weighted average median house price for the eight capital cities was $743,496, according to the REIA Real Estate Market Facts for the December quarter 2016. 
The REIA had recently said that record low interest rates have failed to ease housing woes, with New South Wales leading the decline in affordability across all states in the December quarter of 2016. The RBA has voiced its concern several times, while the NSW Premier Gladys Berejiklian has said housing affordability is "the biggest issue people have across the state".
REIA president Malcolm Gunning said over the year, the median house price increased in all capital cities except Perth and Darwin, reflecting the differing fortunes of state economies. 
“At $1,134,075, Sydney’s median house price is the highest among the capitals whilst Hobart retains the lowest at $430,000 - the figure is 42.2 per cent lower than the national average,” Gunning said.
“The median price for other dwellings increased to $572,254 as median prices increased in Sydney, Melbourne, Hobart and Darwin.
While Hobart and Adelaide had the lowest median prices over the quarter, Hobart had the largest increase in both the median price for houses at 6 per cent and 11.7 per cent for other dwellings.
Both investor finance and owner-occupied housing finance (excluding re-financing) also showed strong increases of 8.8 per cent and 11.1 per cent respectively, after small decreases in the previous quarter, said the REIA.
“The level of investor activity is not unexpected when you consider that 10-year average annual returns for residential investment property range from a low of 6.5 per cent for houses in Perth to 10.5 per cent for two-bedroom units in Sydney with most returns being around 8 per cent. 
“This tells us why property is favoured above other forms of investment,” Gunning said. 
Median rents for houses during the quarter remained steady or increased in all capital cities except Darwin.  Median rents were steady in Brisbane, Adelaide and Perth. Canberra had the largest increase at 9.5 per cent followed by Hobart with a rise of 6.1 per cent. Median rents for other dwellings remained steady or increased in most capital cities except for Sydney, Perth and Darwin. In Melbourne and Canberra, median rents for other dwellings remained steady.
“The weighted average vacancy rate for the eight capital cities decreased to 2.9 per cent during the December quarter, a decrease of 0.2 percentage points. In most capital cities, the vacancy rates dropped by between 0.1 to 0.2 percentage points. In Hobart, the vacancy rate remained steady while in both Darwin and Canberra it increased. Darwin and Perth continue to have the highest vacancy rates at 7.8 per cent and 6.4 per cent respectively.
 
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Median house prices across capitals up 4 percent in December quarter: REIA

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Westpac Banking Corp chief executive Brian Hartzer says the RBA faces a difficult challenge.
They had to, on the one hand, support parts of the economy with low interest rates, while avoiding a housing price bubble, he told The Australian Financial Review's Chanticleer column.
Hartzer advised he does not believe Australia is in the midst of a housing asset bubble.
He says there is no evidence in Westpac's housing lending data that investors are buying houses for a "quick flip" to another buyer.
But he says Michele Bullock's recent comments highlight the need for action by local and state governments to ease the barriers to new housing development.
He thinks there needs to be co-ordinated policy action to fill the demand supply gap.
Hartzer indicated he was not a surprise to Hartzer on why Chinese nationals would want to live in Australia and take advantage of the high quality standard of living, including the education system.
He says foreign investment has been a feature of Australia for many years and continues to support the financing of new unit developments which, in turn, helps to resolve the lack of supply in the residential market.
Hartzer thinks the capital controls in China will eventually have an impact on the amount of money being invested in the Australian housing market.
Fresh data shows foreign buyers were responsible for purchasing about 11 percent of NSW homes, with Chinese buyers accounting for 32 percent of these buyers.
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There's no housing bubble: Westpac chief Brian Hartzer

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GUEST OBSERVER
The announcement by NSW Labor that in government they would lift surcharges for foreign investors on residential homes will slow down the supply of new homes.
Sydney needs more housing supply not less.
So Labor’s proposal to lift the stamp duty surcharge from 4 percent to 7 percent and to double the Land Tax surcharge for foreign investors will be a clear signal that these investors are not wanted. The result will be to minimise this sector of the market and to therefore reduce housing supply.
The Urban Taskforce believes that increasing supply is the key game changer that is needed to help with housing affordability and that this can be done by speeding up housing planning approvals and by minimising extra costs being put on developers by councils and state government agencies.
We recently asked our developer members for examples of where housing projects were stuck in the planning system and were surprised to get a list adding up to around 40,000 new homes that were in limbo.
These projects need to be speeded up to lift housing supply for Sydney. The Department of Planning says an average of 36,000 new homes a year is needed in Sydney over 20 years so in boom times we should be over 40,000 new homes a year. The best performance to-date has been 34,000 so clearly Sydney needs many more new homes.
It is concerning that in the media release by NSW Labor, Shadow Treasurer Ryan Park refers in a negative way to ‘developer mates’. The only industry that is going to provide the massive number of new homes needed for Sydney is the developers but they have to battle a slow and complex planning system and manage as a result holding costs that can reach $500,000 a month for large projects.
The Urban Taskforce is keen to be involved with all political parties in discussions on housing supply and affordability in a positive and constructive manner.
Chris Johnson is chief executive officer of property development industry group Urban Taskforce and can be contacted <a href="https://www.urbantaskforce.com.au/index.php?option=com_content&amp;view=article&amp;id=97&amp;Itemid=126#.Vdaart55dFI" target="_blank">here</a>.
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NSW Labor housing proposals will slow supply: Chris Johnson

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GUEST OBSERVER
The Housing Industry Association, the voice of Australia’s residential building industry supports the Turnbull Government’s focus on first home buyer access and reducing the costs of new housing supply.
Housing affordability is a dominant policy issue in 2017, but it is also a complex one.
A suite of policies to address low housing affordability is required and these policies need to come from the Federal government, state governments, and from cooperation between the two levels.
Changes to negative gearing (and capital gains tax) are not the appropriate policy focus to addressing Australia’s housing affordability challenge. Reducing the cost of new housing supply and tackling the deposit gap faced by aspiring first home buyers is the appropriate core focus.
In this regard a ‘bond aggregator’ model to increase public and social housing supply is a good start. Consideration of allowing first home buyers to access super savings to support a housing deposit is another policy worthy of debate.
A well-designed housing infrastructure fund must also be part of the Federal government’s consideration. A Federal government-backed policy to reduce the price of non-essential infrastructure currently being paid for by new home buyers would play a crucial role in reducing the cost of new housing supply. 
Independent research conducted for HIA by Independent Economics, using the same model as that used by Commonwealth Treasury, provides compelling evidence that amending negative gearing provisions would be a retrograde step as it would reduce both Australian living standards and housing affordability.
In an ‘ideal’ world the two keys to fully addressing Australia’s housing affordability challenge are boosting residential land supply and eliminating stamp duty on residential property conveyances.
Both represent large policy challenges, and can be achieved with cooperation between state governments and the Federal government.
The Henry Tax Review ‘blueprint’ correctly recognised that reforms to housing supply and housing assistance need to come before everything else. Consideration of any policies to amend negative gearing or capital gains tax concessions forget this important finding, provide false hope to aspiring home buyers, and will lead to a deterioration in housing affordability. 
Kristin Brookfield is the Chief Executive Industry Policy at the Housing Industry Association (HIA). You can contact her <a href="https://hia.com.au/IndustryPolicy/PolicyTeam.aspx" target="_blank">here</a>.
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